Sec. 32.01. AUTHORIZED ACTIVITIES. (a) A private club registration permit authorizes alcoholic beverages belonging to members of the club to be:

(1) stored, possessed, and mixed on the club premises; and

(2) served for on-premises consumption only to members of the club and their families and guests, by the drink or in sealed, unsealed, or broken containers of any legal size.

(b) An applicant for or the holder of a private club registration permit may apply to the commission to have the activities authorized under the permit restricted to the storage and service of wine, beer, and malt liquor for members of the club. Except as otherwise provided by this chapter, an applicant for or the holder of a permit that is restricted under this subsection is subject to all the requirements of this chapter. The commission may adopt rules as necessary to implement this subsection.

Sec. 32.02. FEES. (a) Each private club registration permittee shall pay an annual state fee for each separate place of business.

(b) The annual state fee shall be computed at the election of the permittee by using one of the following methods:

(1) A fee based on the highest number of members in good standing during the year for which the permit fee is paid according to the following rates:

0

to

250 members

--

$ 750

251

to

450 members

--

$1,350

451

to

650 members

--

$1,950

651

to

850 members

--

$2,550

851

to

1,000 members

--

$3,000

Over 1,000 members

--

$3 per member; or

(2) Except as provided by Subsection (d) of this section, a fee for an original private club registration permit of $3,500, with a fee for the first renewal of a private club registration permit of $2,750, and a fee for the second and each subsequent renewal of a private club registration permit of $2,000.

(c) A permittee who elects to compute the permit fee based on Subsection (b)(1) of this section may not alter the method by which the fee is calculated until the second renewal or a renewal subsequent to the second renewal.

(d) A permit holder who has elected to restrict the holder's authorized activities under the permit as provided by Section 32.01(b) of this code shall pay an original permit fee of $1,500 and an annual renewal fee of $1,500.

(e) No later than 90 days before the expiration of the year for which the permit fee is paid, the permit holder may submit an amended application with as much additional fee as is required under the amended return.

(f) For a permittee who holds a valid permit on the effective date of this subsection and who elects to pay a permit fee as provided by Subsection (b)(2) of this section, the fee for renewal of that permit is:

(1) $2,750 for the first annual renewal since the original permit was issued; and

(2) $2,000 for a renewal subsequent to the first annual renewal.

(g) Fees collected under this section shall be deposited in the general revenue fund.

Sec. 32.03. QUALIFICATIONS FOR PERMIT. (a) A private club registration permit may only be issued to a club which meets the requirements of this section.

(b) The club must be an association of persons, whether unincorporated or incorporated under the laws of this state, for the promotion of some common object.

(c) Members of the club must be passed on and elected by a committee or board made up of members of the club, and no employee of the club shall be eligible to serve on the membership committee or board.

(d) No application for membership may be approved until the application has been filed with the chairman of the membership committee or board and approved by the chairman. The committee or board may authorize the chairman or a designated agent to issue preliminary memberships without the approval of the committee or board for a period not exceeding seven days on the request of an applicant for membership. A preliminary member has all of the privileges of membership in the club. If the committee or board does not approve the application before the expiration of the preliminary membership, the club shall pay to the state a fee of $3. The club shall remit the fees and record and report preliminary memberships as the commission or the administrator prescribes.

(e) At least 50 members of the club must reside in the county in which the premises of the club are located, or at least 100 members must reside in an area comprised of the county in which the premises of the club is located and an adjacent county or counties.

(f) The club must own, lease, or rent a building, or space in a building of such extent and character as in the judgment of the commission is suitable and adequate for the club's members and their guests.

(g) The club must provide regular food service adequate for its members and their guests.

(h) The club's total annual membership fees, dues, or other income, excluding proceeds from the disposition of alcoholic beverages but including service charges, must be sufficient to defray the annual rental of its leased or rented premises or, if the premises are owned by the club, sufficient to meet the taxes, insurance, and repairs and the interest on any mortgage on the premises.

(i) The club's affairs and management must be conducted by a board of directors, executive committee, or similar body chosen by the members at their annual meeting.

(j) No member or any officer, agent, or employee of the club may be paid or receive any money as salary or other compensation, directly or indirectly, from the disposition of alcoholic beverages to members of the club and their guests, other than charges for the service of the beverages.

(k) A private club registration permit may not be issued to or maintained by a club for a premises located in a dry area if the club operates a sexually oriented business, as defined by Section 243.002, Local Government Code, on the premises.

Sec. 32.04. APPLICATIONS FOR PERMITS; RENEWALS. (a) A private club which meets the requirements set forth in Section 32.03 of this code may apply for a private club registration permit on forms furnished by the commission and containing all information necessary to insure compliance with the provisions of this code.

(b) Each applicant shall furnish a true copy of his application to the commission's district office in the district in which the premises sought to be covered by the permit are located prior to the filing of the original application with the commission at Austin.

(c) Applications for a renewal permit shall be filed with the commission within 30 days prior to the expiration of the current permit.

Acts 1977, 65th Leg., p. 437, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.05. LOCKER SYSTEM. The locker system of storage is a system whereby the club rents a locker to a member in which he may store alcoholic beverages for consumption by himself and his guests. All alcoholic beverages stored at a club under the locker system must be purchased and owned by the member individually.

Acts 1977, 65th Leg., p. 437, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.06. POOL SYSTEM. (a) The pool system of storage may be used in any area. Under this system all members of a pool participate equally in the original purchase of all alcoholic beverages. The original purchase may be funded by a cash contribution from each member or from a loan to the club by a third person guaranteed by all the members. A person who provides a loan to the club under this subsection may be related or unrelated to the club. A loan for the original purchase may be repaid from the alcoholic beverages replacement account. The replacement of all alcoholic beverages shall be paid for either by money assessed equally from each member and collected in advance or by the establishment of an alcoholic beverages replacement account in which a designated percentage of each charge for the service of alcoholic beverages, as determined by the club's governing body, is deposited.

(b) If an alcoholic beverages replacement account is used:

(1) each service check may have printed on it the percentage of the service charge that is to be deposited in the alcoholic beverages replacement account;

(2) no money other than the designated percentage of service charges may be deposited in the replacement account;

(3) the replacement of alcoholic beverages may be paid for only from money in the replacement account;

(4) the club's governing body may transfer from the replacement account to the club's general operating account any portion of the replacement account that the governing body determines is in excess of the amount that will be needed to purchase replacement alcoholic beverages or repay a loan for the original purchase of alcoholic beverages, but it may make only one transfer in a calendar month; and

(5) the club shall maintain a monthly record of the total amount of alcoholic beverage service charges collected, the amount deposited in the replacement account, the amount used to purchase alcoholic beverages or repay a loan for the original purchase of alcoholic beverages, and the amount transferred to the club's general operating account.

(c) A private club may combine the club's alcoholic beverages replacement account, general operating account, and any other account into a single master account if the master account is maintained in accordance with generally accepted accounting principles and the club is able to generate statements reflecting the funds allocated to each component account. If the club contracts with a third party to provide management or other services for the club, the club may permit the club's master account to be combined with the master accounts of other clubs to which the third party provides similar services if the combined account is maintained in accordance with generally accepted accounting principles and the third party is able to generate, for the commissioner's review on request, statements reflecting the funds allocated to each component account of the combined account and the club's master account.

Sec. 32.07. DISPLAY OF PERMIT. A private club registration permit shall be displayed in a conspicuous place at all times on the licensed premises.

Acts 1977, 65th Leg., p. 437, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.08. PURCHASE AND TRANSPORTATION OF ALCOHOLIC BEVERAGES. (a) All distilled spirits sold by a club holding a private club registration permit must be purchased in this state from a holder of a local distributor's permit.

(b) If the club holding the permit is in an area where there are no local distributors, alcoholic beverages may be purchased in any area where local distributors are located and may be transported to the club premises if the club also holds a beverage cartage permit. The transporter may acquire the alcoholic beverages only on the written order of an officer or manager of the club holding the permit. The alcoholic beverages must be accompanied by a written statement furnished and signed by the local distributor showing the name and address of the consignee and consignor, the origin and destination of the shipment, and any other information required by the commission or administrator. The person in charge of the alcoholic beverages while they are being transported shall exhibit the written statement to any representative of the commission or any peace officer on demand, and the statement shall be accepted by the representative or officer as prima facie evidence of the lawful right to transport the alcoholic beverages.

(c) If a private club registration permittee holds a beverage cartage permit and his premises are located in a regional airport governed by a board, commission, or authority composed of members from two or more counties, and there is no local distributor at the airport, the private club registration permittee may purchase alcoholic beverages from any local distributor in a trade area served by the airport and transport them to his licensed premises. The transportation of the beverages must be in accordance with Subsection (b) of this section.

Sec. 32.09. TEMPORARY MEMBERS. (a) The manager or other person in charge of the club premises may allow a person to enter the club if he possesses a valid temporary membership card which has no erasures or changes and which has the temporary dates in a prominent position on the card. A temporary member may enjoy the club's services and privileges for a period of not more than three days per invitation. A temporary member may bring not more than three guests to the club and must remain in their presence while they are at the club.

(b) At the time of his admission the temporary member shall pay the club a fee of $3, which shall represent the fee payable by the permittee to the state. All fees and payments from temporary members shall be collected in cash or through credit cards approved by the commission or administrator.

(c) Temporary memberships shall be governed by rules promulgated by the commission consistent with the provisions of this section.

Sec. 32.10. GUESTS. (a) Guests shall be limited to those who accompany a member or temporary member onto the premises or for whom a member, other than a temporary member, has made prior arrangements with the management of the club.

(b) Except as provided in Subsection (c) of this section no guest shall be permitted to pay, by cash or otherwise, for any service of alcoholic beverages. Any charge for a service rendered to a guest by the club must be billed by the club to the member or temporary member sponsoring the guest. A club shall bill a member other than a temporary member for the service of guests in the club's regular billing cycle.

(c) The manager of a hotel who is a member of a private club located within the hotel building may issue a guest card to a patron of the hotel who is staying in the hotel overnight or longer. The holder of the guest card may be served alcoholic beverages in the club or the holder's hotel room. The guest may not be allowed to pay, by cash or otherwise, at the time of service in the private club. The charge for service shall be billed to the hotel manager's account in the hotel and shall be collected by the hotel manager along with other hotel charges, including the charge for using the hotel room, when the patron leaves the hotel. The hotel records shall be available for inspection at the request of the commission. If the club operates under the locker system a guest shall be served from the locker rented to the manager of the hotel.

(d) The commission shall promulgate rules necessary to implement the provisions of this section.

Sec. 32.11. FRATERNAL AND VETERANS ORGANIZATIONS. (a) In this section:

(1) "Fraternal organization" means:

(A) any chapter, aerie, parlor, lodge, or other local unit of an American national fraternal organization or Texas state fraternal organization that, as the owner, lessee, or occupant, has operated an establishment for fraternal purposes for at least one year. If an American national fraternal organization, it must actively operate in not fewer than 31 states and have at least 300 local units in those 31 states, and must have been in active, continuous existence for at least 20 years. If a Texas state fraternal organization, it must actively operate in at least two counties of the state and have at least 10 local units in those two counties, and must have been in active, continuous existence for at least five years;

(B) a hall association or building association of a local unit described in Paragraph (A), all the capital stock of which is owned by the local unit or the members of the local unit, and which operates the clubroom facilities of the local unit;

(C) a building association not owned by a local unit described in Paragraph (A) but one that is composed wholly of members appointed by a county commissioners court to administer, manage, and control an exposition center containing an exhibition area of not less than 100,000 square feet and an arena with not less than 6,000 fixed seats, situated on property with an area of not less than 50 acres that is owned, together with all buildings, appurtenances, and parking areas, by a county;

(D) a chapter or other local unit of an American national fraternal organization that promotes physical fitness and provides classes in athletics to children and that, as owner, lessee, or occupant, has operated an establishment for fraternal purposes for at least one year. The fraternal organization must:

(i) actively operate in not fewer than 12 states;

(ii) have at least six local units in this state; and

(iii) have at least one unit in this state that has been in active, continuous existence for at least 75 years; or

(E) a chapter or other local unit of an American national fraternal organization that promotes the moral, educational, social, and recreational welfare of merchant seafarers and that, as owner, lessee, or occupant, has operated an establishment for fraternal purposes for at least one year. The fraternal organization must:

(i) actively operate in not fewer than 12 states;

(ii) have at least four local units in this state; and

(iii) have at least one unit in this state that has been in active, continuous existence for at least 15 years.

(2) "Veterans organization" means an organization composed of members or former members of the armed forces of the United States which is organized for patriotic and public service purposes, including the American Legion, Veterans of Foreign Wars, Disabled American Veterans, Jewish War Veterans, American GI Forum, Catholic War Veterans, or any veterans organization chartered by the United States Congress.

(b) The permit fee imposed by Section 32.02 and the provisions of Sections 32.03 and 32.10 requiring regular food service and prohibiting guests from paying in cash do not apply to a private club established by a fraternal or veterans organization. The private club is also exempt from Sections 32.05 and 32.06, and the members of the club may use any club funds owned by them jointly, including revenue from the service of alcoholic beverages, to replenish their joint stock of alcoholic beverages.

(c) The requirement that the fraternal or veterans organization hold a private club registration permit is satisfied by the issuance of a certificate by the commission that states that the organization meets the requirements of this section.

(d) All other provisions of this code apply to fraternal and veterans organizations.

(e) A fraternal or veterans organization that holds a permit under this chapter and the private club established under that permit are considered separate entities for the purposes of determining compliance with and enforcing this code. The fraternal or veterans organization shall establish a membership committee for the permitted entity for the purposes of Sections 32.03(c) and (d). Membership in the private club is governed by this code. Membership in the fraternal or veterans organization is not subject to the requirements of this code.

Sec. 32.12. INSPECTION OF PREMISES. The acceptance of a private club registration permit constitutes an express agreement and consent on the part of the private club that any authorized representative of the commission or any peace officer has the right and privilege to freely enter the club premises at any time to conduct an investigation or to inspect the premises for the purpose of performing a duty imposed by this code.

Acts 1977, 65th Leg., p. 439, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.13. INSPECTION OF BOOKS AND RECORDS. All books and records pertaining to the operation of any permittee club, including a current listing, correct to the last day of the preceding month, of all members of the club who have liquor stored on the club premises under either the locker or pool system, shall be made available to the commission or its authorized representatives on request.

Acts 1977, 65th Leg., p. 439, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.14. UNREGISTERED CLUBS; PROHIBITED ACTIVITIES. (a) No permittee, licensee, or any other person shall deliver, transport, or carry an alcoholic beverage to, into, or on the premises of any establishment, location, room, or place purporting to be a club, or holding itself out to the public or any person as a club or private club, unless the club holds a private club registration permit.

(b) No person may store, possess, mix, or serve by the drink or in broken or unsealed containers an alcoholic beverage on the premises of any establishment, location, room, or place purporting to be a club or private club unless the club holds a private club registration permit.

(c) An alcoholic beverage stored or possessed on the premises of any establishment, location, room, or place purporting to be a club, or holding itself out to the public or any person as a club or private club, is declared to be an illicit beverage and subject to seizure without a warrant unless a private club registration permit has been issued for the premises, location, room, or place.

Acts 1977, 65th Leg., p. 440, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.15. REMOVAL OF BEVERAGES FROM PREMISES. A private club, irrespective of location or system of storage of alcoholic beverages, may not permit any person to remove any alcoholic beverages from the club premises, except as authorized by Subsection (b) of Section 28.10 of this code.

Sec. 32.16. UNAUTHORIZED MEMBERSHIP. No private club registration permittee may allow its average membership to exceed that authorized by its permit.

Acts 1977, 65th Leg., p. 440, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.17. CANCELLATION OR SUSPENSION OF PERMIT; GROUNDS. (a) The commission or administrator may cancel or suspend for a period of time not exceeding 60 days, after notice and hearing, an original or renewal private club registration permit on finding that the permittee club has:

(1) sold, offered for sale, purchased, or held title to any alcoholic beverage so as to constitute an open saloon;

(2) refused to allow an authorized agent or representative of the commission or a peace officer to come on the club premises for the purposes of inspecting alcoholic beverages stored on the premises or investigating compliance with the provisions of this code;

(3) refused to furnish the commission or its agent or representative when requested any information pertaining to the storage, possession, serving, or consumption of alcoholic beverages on club premises;

(4) permitted or allowed any alcoholic beverages stored on club premises to be served or consumed at any place other than on the club premises;

(5) failed to maintain an adequate building at the address for which the private club registration permit was issued;

(6) caused, permitted, or allowed any member of a club in a dry area to store any liquor on club premises except under the locker system;

(7) caused, permitted, or allowed any person to consume or be served any alcoholic beverage on the club premises:

(A) at any time on Sunday between the hours of 1:15 a.m. and 10 a.m. or on any other day at any time between the hours of 12:15 a.m. and 7 a.m., if the club does not have a private club late hours permit, except that an alcoholic beverage served to a customer between 10 a.m. and 12 noon on Sunday must be provided during the service of food to the customer; or

(B) at any time on Sunday between the hours of 2 a.m. and 10 a.m. or on any other day at any time between the hours of 2 a.m. and 7 a.m., if the club has a private club late hours permit, except that an alcoholic beverage served to a customer between 10 a.m. and 12 noon on Sunday must be provided during the service of food to the customer; or

(8) violated or assisted, aided or abetted the violation of any provision of this code.

(b) As used in Subsection (a)(1) of this section, the term "open saloon" means any place where an alcoholic beverage is sold or offered for sale for beverage purposes by the drink or in broken or unsealed containers, or a place where any alcoholic beverage is sold or offered for sale for on-premises consumption.

(c) After notice and an opportunity for a hearing, the commission or administrator may cancel or suspend the private club registration permit of a permit holder who has restricted the holder's authorized activities under the permit as provided by Section 32.01(b) of this code on a determination that the permit holder is storing or serving alcoholic beverages to club members other than, or in addition to, wine, beer, and malt liquor.

Sec. 32.18. APPEALS FROM ORDERS OF COMMISSION OR ADMINISTRATOR. An appeal from an order of the commission or administrator refusing, cancelling, or suspending a private club registration permit shall be taken to the district court of the county in which the private club is located. The proceeding on appeal shall be under the substantial evidence rule. The rules applicable to ordinary civil suits apply, with the following exceptions, which shall be construed literally:

(1) all appeals shall be perfected and filed within 30 days after the order, decision, or ruling of the commission or administrator becomes final and appealable;

(2) all causes shall be tried before the judge within 20 days from the filing, and neither party shall be entitled to a jury; and

(3) the order, decision, or ruling of the commission or administrator may be suspended or modified by the district court pending a trial on the merits, but the final judgment of the district court shall not be modified or suspended pending appeal.

Sec. 32.19. AIDING OR ABETTING VIOLATION. A person who commits, assists, aids, or abets a violation of this chapter commits an offense.

Acts 1977, 65th Leg., p. 441, ch. 194, Sec. 1, eff. Sept. 1, 1977.

Sec. 32.20. STAMPS. (a) A private club registration permittee may not possess or permit a person to possess on the premises distilled spirits in any container that does not bear a serially numbered identification stamp issued by the commission or other identification approved by the commission.

(b) A holder of a local distributor's permit may not knowingly sell, ship, or deliver distilled spirits in any container that does not bear a serially numbered identification stamp issued by the commission or other identification approved by the commission.

(c) Identification stamps may be issued only to a holder of a local distributor's permit who shall affix the stamps as prescribed by the commission or administrator.

Added by Acts 1993, 73rd Leg., ch. 934, Sec. 42, eff. Jan. 1, 1994.

Sec. 32.201. POSSESSION OF CERTAIN STAMPS. A private club registration permittee may not possess a stamp used to show payment of a tax unless the stamp is affixed to a bottle or container of liquor.

Sec. 32.21. PERMIT INELIGIBILITY. A private club registration permit may not be issued to:

(1) a person whose permit was canceled for a violation of Section 28.06(c) of this code;

(2) a person who held an interest in a permit that was canceled for a violation of Section 28.06(c) of this code;

(3) a person who held 50 percent or more of the stock, directly or indirectly, of a corporation whose permit was canceled for a violation of Section 28.06(c) of this code;

(4) a corporation, if a person holding 50 percent or more of the corporation's stock, directly or indirectly, is disqualified from obtaining a permit under Subdivision (3) of this section; or

(5) a person who resides with a person who is barred from obtaining a permit because of a violation of Section 28.06(c) of this code.

Added by Acts 1993, 73rd Leg., ch. 934, Sec. 42, eff. Jan. 1, 1994.

Sec. 32.22. SUMMARY SUSPENSION. (a) The commission may summarily suspend, without a hearing, the permit of a permittee who fails to file a return or make a tax payment. Chapter 2001, Government Code does not apply to the commission in the enforcement and administration of this section.

(b) A suspension under this section takes effect on the third day after the date the notice of suspension is given. The notice of suspension shall be sent by registered or certified mail to the permittee, the permittee's agent, servant, or employee if not given in person.

(c) The commission shall terminate a suspension made under this section when the permittee files all required returns and makes all required tax payments, including payment of penalties that are due.

Sec. 32.23. FOOD AND BEVERAGE CERTIFICATE. (a) A holder of a private club registration permit may be issued a food and beverage certificate by the commission if the gross receipts of mixed beverages served by the holder are 50 percent or less of the total gross receipts from the premises.

(b) An applicant or holder of a food and beverage certificate shall have food service facilities for the preparation and service of multiple entrees. The commission shall adopt rules as necessary to assure that the holder of a food and beverage certificate maintains food service on the premises for which a food and beverage certificate has been issued.

(c) The fee for a food and beverage certificate shall be set at a level sufficient to recover the cost of issuing the certificate and administering this section.

(d) On receipt of an application for a renewal of a private club registration permit by a holder who also holds a food and beverage certificate, the commission shall request certification by the comptroller to determine whether the holder is in compliance with Subsection (a). In determining compliance with Subsection (a), the comptroller shall compare the permittee's gross receipts tax reports with the permittee's sales tax reports for the premises. If the comptroller does not certify that the holder is in compliance with Subsection (a), the commission may not renew the certificate.

(e) A certificate expires on the expiration of the primary private club registration permit. A holder of a private club registration permit who is denied renewal of a certificate may not apply for a new certificate until the day after the first anniversary of the determination of the comptroller under Subsection (d).

(f) Section 11.11 does not apply to the holder of a food and beverage certificate.

Sec. 32.24. BREACH OF PEACE. The commission or administrator may suspend or cancel a private club registration permit after giving the holder notice and the opportunity to show compliance with the requirements of law for the retention of the permit if the commission or administrator finds that:

(1) a breach of the peace has occurred on the premises covered by the permit or on a premises under the control of the holder; and

(2) the breach of the peace resulted from the holder's improper supervision of a person who was allowed on the premises covered by the permit or on a premises under the holder's control.